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Ngā ture tāke motuhake mō ngā takuhe me ngā utu tāpiri Special tax rules for grants and subsidies

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Whether you're liable for income tax on grants and subsidies depends on:

  • who you received the payment from
  • the type of payment
  • what it was used for.

To see if you will have to pay income tax, follow these special tax rules:

Type of payment Liable for income tax

Grant or subsidy, where the amount you receive is based on either:

  • your income
  • the difference between your actual income and the income that you should have received
  • your income not being enough.

 Yes

A grant or subsidy paid towards a business expense (except for government grants) eg vehicle expenses, rent, rates, insurance.

Yes

Payment to offset capital or expenses that don't produce income.

 

No

(Claims for depreciation must be based on the cost of the asset less the value of the grant or subsidy.)

Work and Income self-employment subsidy used for private costs, eg groceries.

Yes

Payment to offset the cost of, or reinstate, a capital asset used in producing gross income.,

No

Any surplus from a grant or subsidy that goes into an organisation's general fund.

Yes